Investment in rental property also is increasing, but as demand grows, prices grow too. Many of the more desirable locations are long gone, or soon will be.
If you are considering investing in an apartment building, what should you look for?
"Cash flow, buy in the best locations, and buy the Volkswagen in the Rolls-Royce lot," said Center City real estate broker and developer Allan Domb. In other words, be smart with your money.
Mark Wade, an agent with Prudential Fox & Roach in Center City, said certain locales are consistently very popular. Because of medical students, for example, "areas close to the University of Pennsylvania or Jefferson Medical Center always seem to make excellent investments," he said.
Often overlooked by those looking to purchase rental properties, Wade said, is how long a unit might sit vacant.
These days, however, unless an apartment is fit only for rodents, it is unlikely to stay empty for long. Marcus & Millichap says the vacancy rate in this region - the eight-county Philadelphia metro area, plus New Castle County, Del. - will drop to 4.4 percent by year's end.
Center City's vacancy rate is officially 4 percent now, though some real estate agents and landlords say the central business district's rate is probably as low as 1.8 percent.
For comparison, Miles & Millichap says the vacancy rate in the city's Fox Chase/Lawndale sections is 1.7 percent, while Moorestown/Maple Shade/Mount Laurel's rate is 6.7 percent.
"Property owners are benefiting from job creation in multiple private-employment sectors and steady tenant demand from a large population of college students and recent graduates," the Marcus & Millichap analysts said.
